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Thursday, September 19, 2019

U.S. ATTORNEY'S OFFICE FOR THE EASTERN DISTRICT OF NEW YORK: District Court Enters Permanent Injunctions Shutting Down International Mail Fraud Scheme and Approving Civil Penalty of Over $700,000

By Lene Caracas-Apuntar | Dec 26, 2018

U.S. Attorney's Office for the Eastern District of New York issued the following announcement on Dec. 21.

The U.S. District Court for the Eastern District of New York has permanently barred 10 individuals and businesses from operating an alleged multi-million dollar international mail-fraud scheme. The consent decrees entered by United States District Judge Brian M. Cogan resolve civil fraud claims brought by the United States Attorney’s Office for the Eastern District of New York. Five of the defendants – Kimberly Anne Stamps of Gilbert, Arizona and her companies, KPS Productions, LLC, KPS Promotions, LLC, JKS Ventures, LLC and JJMK Enterprises, LLC – also agreed to pay a $726,539.20 penalty, the largest civil penalty ever collected in the EDNY for a violation of a United States Postal Service (USPS) cease and desist order against a mass mailer.

The United States alleged that beginning as early as 2012, the defendants operated a multi-million dollar mass-mailing scheme that preyed upon elderly and vulnerable individuals. From May 2015 to January 2018, the defendants mailed over 4.8 million solicitation letters to recipients in New York, throughout the United States and abroad falsely indicating that the recipients had won large cash prizes ranging from hundreds of thousands of dollars to millions of dollars, but were required to return processing fees of $20 to $50 to receive payment. The solicitations were sent on behalf of fictitious organizations and departments, such as “Global Servicing Center,” “Premium Award Center,” “Notification Committee” and “Winners Search Advisory,” and included fake signatures from fictitious corporate officers. The victims who paid the processing fees never received the promised cash prizes.

In one month alone, the defendants received over 16,000 responses to their schemes from victims worldwide. One victim of the defendants’ scheme, who resides in Brooklyn, returned more than 400 responses to defendants’ fraudulent solicitations, with total payments exceeding $10,000. The United States estimates that before the scheme was shut down, the defendants received more than $3 million in victim payments annually.

The foregoing are allegations, which the defendants dispute, and there has been no trial or any permanent judicial finding of fact or law.

“The defendants misled elderly and vulnerable victims by promising life-changing cash prizes that never arrived,” stated United States Attorney Donoghue. “The court-ordered injunctions permanently stop these schemes, and the civil penalty should serve as a warning to other fraudulent mass-mailers that we are committed to protecting the public from these schemes, and will hold the perpetrators and enablers of such schemes accountable.” Mr. Donoghue thanked the United States Postal Inspection Service for its investigatory support.

Original source can be found here.

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